{{ currentBoardShortName }}
  • Markets
  • Indices
  • FX
  • Energy
  • Metals
  • Live
Markets
As of: {{timeStamp.date}}
{{timeStamp.time}}

Markets

{{ currentBoardShortName }}
  • Markets
  • Indices
  • FX
  • Energy
  • Metals
  • Live
{{data.symbol | reutersRICLabelFormat:group.RICS}}
 
{{data.netChng | number: 4 }}
{{data.netChng | number: 2 }}
{{data | displayCurrencySymbol}} {{data.price | number: 4 }}
{{data.price | number: 2 }}
{{data.symbol | reutersRICLabelFormat:group.RICS}}
 
{{data.netChng | number: 4 }}
{{data.netChng | number: 2 }}
{{data | displayCurrencySymbol}} {{data.price | number: 4 }}
{{data.price | number: 2 }}

Latest Videos

{{ currentStream.Name }}

Related Video

Continuous Play:
ON OFF

The information you requested is not available at this time, please check back again soon.

Dec 6, 2017

'The buck stops with me’: Laurentian CEO takes heat for mortgage ‘documentation issues’

Laurentian Bank CEO: 'The buck stops with me' on mortgage issue

VIDEO SIGN OUT

Security Not Found

The stock symbol {{StockChart.Ric}} does not exist

See Full Stock Page »

Laurentian Bank Chief Executive Officer François Desjardins isn’t shirking any responsibility for the issues with mortgage documentation that sent shares of the company to their worst single-day drop in eight years on Tuesday.

In an interview on BNN, Desjardins said ultimately the responsibility over the bank’s operations – including issues in its mortgage book – fall at his feet.

“The buck stops with me, and this happened under my watch … the ultimate person who is responsible has to be me,” he said Wednesday morning.

On Tuesday, Laurentian (LB.TO) revealed an internal audit uncovered some "documentation issues and client misrepresentations" in mortgages sold to a third party. The lender said it will repurchase $89 million worth of the offending mortgages in the first quarter, about 4.9 per cent of the total loans sold to the unidentified buyer.

The bank said the number of offending mortgages could rise, as it has not yet completed its audit. Laurentian said all of the mortgages slated to be repurchased are performing in line with the bank’s overall mortgage portfolio.

‘Unfair’ to compare Laurentian’s mortgage data issues with Home Capital scandal: CIBC's Sedran

Robert Sedran, head of equity research at CIBC Capital Markets, tells Paul Bagnell it’s unfair to compare Laurentian Bank’s mortgage data issues with Home Capital and that it won’t develop into a huge problem for the bank.

All told, Laurentian may be on the hook to repurchase as much as $304 million in mortgages, though Desjardins said he doesn’t expect the repurchases to be material to its operations, funding or capital.

“That [$304 million] represents less than half a per cent of the total book of the bank and it’s not material for liquidity purposes because I have cash on hand,” Desjardins said. “I can buy those loans back today.”

He noted Laurentian came to a mutual agreement to repurchase the offending mortgages, rather than it being a response to demands from the unidentified third party.

“It’s a genuine mistake, so what do you do when you make a mistake? You fix it,” he said.

In contrast to the mortgage disclosure scandal that rocked Home Capital Group (HCG.TO), Laurentian said there’s no evidence of intentional deception.

“No employees were implicated in any misrepresentations and the documentation issues appear to have been unintentional,” the bank said in its annual report, adding there’s “no significant concentration of mortgages with misrepresentations with any single broker.”

Nonetheless, Manulife Investments Chief Investment Strategist Philip Petursson told BNN the markets tend to have a knee-jerk reaction to any news of this nature after being spooked by Home Capital’s crisis.

“What the market is thinking is, here we go again,” he said. “Here’s another mortgage issue … any news like this, as we saw yesterday, is bound to set the market into sell mode.”